Posted on: 30th Aug, 2010 07:57 pm
we filed a chapter 7 bankruptcy and our mortgage is discharged; should we sign a deed in lieu of foreclosure or let the house go in foreclosure? the bank had a foreclosure hearing (we did not get notice) and sent us a notice of final ruling. they contacted us shortly after about a deed in lieu that we had been trying to work with them. there was also a short sale offer we thought was being worked but found out now the bank does not want to do a short sale. my husband is afraid signing the deed in lieu and estoppel and lien affidavits may obligated us for $$. is it really a benefit to our credit to do the deed at this point? discharge was one year ago. the bank is giving us one day to return the paperwork for the deed, so we don’t have time to see an attorney (or money for one). our bankruptcy attorney says they do not know what effect this has and cannot help.
Hi Guest!
Welcome to forums!
As the loan has been discharged in your bankruptcy filing, the lender will not be able to come after you for the deficient amount resulting from the sale of the property through a deed in lieu of foreclosure. In my opinion, it would be a good option to go for a deed in lieu of foreclosure and get rid of the property.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
As the loan has been discharged in your bankruptcy filing, the lender will not be able to come after you for the deficient amount resulting from the sale of the property through a deed in lieu of foreclosure. In my opinion, it would be a good option to go for a deed in lieu of foreclosure and get rid of the property.
Feel free to ask if you've further queries.
Sussane
I have a couple of concerns:
1.The bank finalized the foreclosure in court (without notifying us), so does the deed really help our credit? Or can we get a triple wammy with the bankruptcy, foreclosure, and deed-in-lieu?
2. The estoppel with the deed-in-lieu says we 'aver that we are not insolvent as defined under the bankruptcy code' and we actually are because my company had a lay off a year ago and my husband just found a permanent one (we hope) after his company closed its doors over a year-and-a-half ago. Our bills are higher than we earn, and we are struggling. I should mention that house above was not our primary residence so we are not protected there from taxes. We had it rented (only for the mortgage payment because we couldn sell it). The renters skipped out owing us a lot of money and even stole our appliances. That was part of why we ended up doing a bankruptcy. I ca even take them to court for the owed money because we did the bankruptcy. We renegotiated our home and are fighting hard to keep making those payments. (BTW-same bank)
3. There are not leans on the property, however, if there is something we don know about can we be liable fot it later with the bank if we sign the lien affidavit, etc. and it something comes up? Fore example, we were mowing the yard (even though it was discharged and no one lives there) and then one day noticed the yard looked mowed already. Never got anything from the city or anything, but what if they started mowing it too because they thought it was abandoned and then try to tack something on later? The city also requires trash collection; we stopped paying that when it was discharged (I have a feeling that will become our responsibility).
Thanks so much for your advice.
1.The bank finalized the foreclosure in court (without notifying us), so does the deed really help our credit? Or can we get a triple wammy with the bankruptcy, foreclosure, and deed-in-lieu?
2. The estoppel with the deed-in-lieu says we 'aver that we are not insolvent as defined under the bankruptcy code' and we actually are because my company had a lay off a year ago and my husband just found a permanent one (we hope) after his company closed its doors over a year-and-a-half ago. Our bills are higher than we earn, and we are struggling. I should mention that house above was not our primary residence so we are not protected there from taxes. We had it rented (only for the mortgage payment because we couldn sell it). The renters skipped out owing us a lot of money and even stole our appliances. That was part of why we ended up doing a bankruptcy. I ca even take them to court for the owed money because we did the bankruptcy. We renegotiated our home and are fighting hard to keep making those payments. (BTW-same bank)
3. There are not leans on the property, however, if there is something we don know about can we be liable fot it later with the bank if we sign the lien affidavit, etc. and it something comes up? Fore example, we were mowing the yard (even though it was discharged and no one lives there) and then one day noticed the yard looked mowed already. Never got anything from the city or anything, but what if they started mowing it too because they thought it was abandoned and then try to tack something on later? The city also requires trash collection; we stopped paying that when it was discharged (I have a feeling that will become our responsibility).
Thanks so much for your advice.
One more thing. Our bankruptcy attorney is no help with this. He says they know NOTHING about how this works. His office said they just assume most of their clients go into foreclosure. He did not help negotiate with anything during the process. I am convinced the attorneys are just a portal by which you can submit your paperwork and avoid additional time and submissions. The court assumes they have done due diligence and that they do not have to (that's the difference between doing it yourself and using an attorney). Sorry, that may be just a vent.
Welcome Guest,
The bank has to notify you regarding the foreclosure sale. If they don't notify you, then that's illegal. If the foreclosure sale has not taken place, then you can apply for a deed in lieu of foreclosure. As far as the liens are concerned, it has been discharged in bankruptcy filing. You won't be liable for paying it anymore.
The bank has to notify you regarding the foreclosure sale. If they don't notify you, then that's illegal. If the foreclosure sale has not taken place, then you can apply for a deed in lieu of foreclosure. As far as the liens are concerned, it has been discharged in bankruptcy filing. You won't be liable for paying it anymore.